How much are disengaged employees costing your company? If we zoom out, Gallup estimates the cost of disengagement to be between $960 billion and $1.2 trillion per year. So what drives engagement and what strategies can leaders use to create an environment where both engagement and productivity thrive?
Using leading social science research as our guide, we will uncover why the key to employee engagement is highly intentional performance management. We will also reveal the 3 research backed strategies in effective performance management and highlight the key players involved in the performance management process.
The Intersection of Employee Engagement and Performance Management
Companies with highly engaged employees outperform companies with disengaged employees on all accounts, including higher profitability, productivity, customer metrics and decreased turnover. While the benefits of high engagement are evident, even with this understanding, many leaders aren’t clear about the strategies that lead success.
We can learn about employee engagement from leaders like Gallup and Culture Amp who say that the top driver of engagement, especially for millennials, is the opportunity to learn and grow. New social science researchshows that strategic performance management allows leaders to impact employee development and learning, and thereby increase engagement.
A New Approach
When it comes to evaluating employee performance, outdated processes are being replaced by new norms. Companies are ditching the annual performance review (traditionally accompanied by forced ranking systems) and revamping their processes entirely. Here, we will outline what science reveals as the 3 non-negotiable strategies of an effective performance management program.
According to J.Lee Whittington, professor of management at the University of Dallas, high employee engagement is directly impacted by an intentional, well thought out performance management program. In his new book, Enhancing Employee Engagement: An Evidence Based Approach, Whittington highlights 3 non-negotiable strategies companies need to take into account for highly effective performance management that leads to increased engagement.
– Clear Expectations: The first step in the performance management process begins when an employee joins your company. During the first week, it’s important that the first meeting between manager and employee centers around clarifying expectations. According to research, in this initial meeting, managers should review the role description, clarify responsibilities, standards of evaluation, reporting relationships, and acclimate the new hire to the organizational culture and values.
According to Gallup, only 50% of employees clearly know what is expected of them at work, so there’s a huge opportunity for improvement here. Clear role expectations often begin with a role description and should extend to goals and key objectives.
– Goals and Key Objectives: Studies have shown the effect of goal setting on performance for decades. Goals should be clear, specific and challenging and help employees prioritize their work. Effective goal setting is not top down, and always involves employees in the process.
When employees experience personal meaning through a collective purpose, engagement soars.
During the goal setting process, managers can help their team members connect their work to the success of the company. Employees need to clearly see how their role contributes to the success of their organization. According to Gallup, employees who strongly agree that they can link their goals to the organization’s goals are 3.5 times more likely to be engaged. When employees experience personal meaning through a collective purpose, engagement soars.
– Frequent Feedback: Old school performance management typically focuses on one employee feedback event, the end of year performance review. In Enhancing Employee Engagement: An Evidence Based Approach, Whittington emphasizes the importance of goal related feedback provided on a regular basis. In a recent conversation Whittington mentioned that, “the biggest things teams seem to be lacking is regular, concrete, expectations based feedback.” Feedback should reflect the role expectations set from the start.
Managers can implement programs that help them engage in more frequent feedback through ongoing and recurring one on one meetings. These sessions provide a regular venue for recognition, constructive feedback, growth and development. One on ones also provide the time for managers and employees to continually reassess goals and expectations based on the needs of the organization. Although cadence may vary with each organization, research shows one on ones that occur once a week works best.
The Key Players Involved
A strong performance management program does not rest on the shoulders of one single person and requires involvement from more than just the CEO or other top leaders. Whittington notes that among the key players establishing a performance management program, HR and direct managers have a substantial impact. Those individuals must work together and partner to develop and implement a comprehensive performance management process.
HR teams design programs that impact the entire employee lifecycle, from an employee’s first day through onboarding and establishing a cadence for regular employee feedback and evaluation. When it comes to performance management, HR teams can source Performance Management Technology to help implement the types of role clarity, goal setting and feedback programs that matter most. But a successful performance management program cannot rely on technology alone.
Well designed performance management systems will fail if they are not supported by active engagement from an employee’s manager. The continued involvement of managers in the entire performance management process signals their commitment to the individual employee’s growth and development. Using technology, managers help to reinforce and sustain the programs they devise.
Leaders who are building organizations where both organizational performance and employee engagement thrive, need to develop and maintain effective performance management strategies. As the research shows, it’s important to be highly intentional and take into account clear role expectations, well defined goals and a methodology for receiving and providing ongoing employee feedback. Leaders that enable strong partnerships between HR and management will also benefit most.
How engaged is your workforce? What programs do you have in place to enable your company to thrive?
Reference: Courtney Bigony (@CourtneyBigony) is Director of People Science & Humanresourcestoday.